Generally speaking, the 200-day defines the primary trend, with a posture above this level signaling a longer-term uptrend.

Summing up the backdrop

The market recovery attempt is intact, though the areas above define the bull/bear tension.

Looking ahead, the technical question is the response to the 200-day moving average. Namely, do the markets sell off aggressively from the 200-day moving average, or can they hold tightly to resistance, positioning for a breakout?

Time will tell, but the bull case technically gets the benefit of the doubt barring a violation of the support points detailed above.

Tuesday’s Watch List

The charts below detail names that are technically well positioned. These are radar screen names -- sectors or stocks poised to move in the near term. For the original comments on the stocks below, see The Technical Indicator Library.

ETF

Symbol

Mon Close

Support

Resistance

Semiconductor HOLDRs

SMH

$31.62

$30.80

$32.00

Drilling down further, the semiconductor sector
SMH, -2.37%
is showing signs of life.

As illustrated, the group has cleared a three-month downtrend that closely tracked the 50-day moving average.

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